PR: 32Red Plc's Trading and Strategy Update October 2006


Forum Cheermeister
Staff member
Jun 30, 1998
32Red Plc
(the Company)

Trading and Strategy Update October 2006

Further to the Companys half year trading announcement on 31 August, 32Red today provides an update on its performance during the third quarter of 2006 ended 30 September. Additionally 32Red reports on the Companys strategic progress.

Key financials:

Total revenues for Q3 increased by 55.8% to 4.2m (Q3 2005: 2.7m) including contribution from the recently acquired BetDirect business

Casino revenues for the Q3 decreased approximately 10% on Q3 2005 due to the widely reported industry-wide issues across the summer

Poker revenues rose by 77% against the corresponding period in 2005 to 0.4 million.

Since the summer there has been a steady recovery in both poker and casino. This trend has continued in the current quarter with daily average performance for both gross win and new player recruitment in October across both the casino and poker platforms encouraging

Bet Direct revenues of 1.57m in Q3 2006. Integration of Bet Direct continues apace, online sportsbetting platform migrated to Gibraltar. New casino and poker platforms in place.

Withdrawal from US market on 13 October 2006. EBIT from USA in H106 is not material to group performance. Bet Direct continues its longstanding zero exposure to the USA.

Strong, established UK presence. Expanded but focused marketing in the UK (including the sponsorship of Aston Villa) and the acquisition of BetDirect will be key to the Companys performance going forward.

Key Performance Indicators:

Active customers in Q3 2006 grew to 49,898 (Q3 2005: 6,708)

- Casino active players 8,932, up 133 % on 2005
- Poker active players 7,695, up 168 % on 2005
- Bet Direct active customers 33,271 active in Quarter 3 2006

New casino players increased by 185 % to 5,452 (2005: 1,915)

New poker players increased by 138 % to 3,812 (2005: 1,603)

Total new Bet Direct customers of 9,724

Q3 casino player yield of 251, poker player yield of 52 (Q2 2006: casino of 396; poker of 39)

Cost per acquisition for 32Red (including affiliate costs) of casino 137 and poker 21, compared to first half 2006 of casino 160 and poker 31.

Ed Ware, CEO commented:
We are pleased to report that the business has continued to recover from the industry-wide dip experienced in and around the 2006 FIFA World Cup. Recent trends in the business are encouraging and our daily average performance in activity rates, revenues and new real money players are progressing. We are currently experiencing particularly strong levels of new real money player sign-ups at the casino and poker room supported by our sponsorship of Aston Villa which has markedly increased brand recognition and our profile.

Much has been achieved at Bet Direct and its integration and development remains on track. The online sportsbook was successfully migrated to Gibraltar in September and 32Red took control of the vital URL,
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, on 1st October. A review of Bet Directs pricing and liability management strategy is in progress and areas of margin improvement have already been identified and acted upon.

32Red is an established player in the UK market and the recent developments in respect of the American market supports our longstanding strategy of marketing the brand to the UK audience. The Board believes that our strong UK presence through the 32Red brand, our sponsorship of Aston Villa and the recent acquisition of Bet Direct positions the Group well for continued development and progress.

23 October 2006


32Red Plc Tel: 00 35 049 396
Ed Ware, CEO

College Hill Associates Tel: 020 7457 2020
Matthew Smallwood

Notes to Editors

32Red is an award-winning UK focussed online casino and poker operator licensed, regulated and based in Gibraltar. The Company is allied to best of breed partners including Microgaming Software Systems, BarclayCard Merchant Services and GibTele.Com. For the past 3 years 32Red has been awarded Best Casino by Watchdog and Player Advocate site Casinomeister.

The Company attracts players from around the world but has a predominantly UK player base, with the majority of revenues at
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coming from the UK.

On 23rd September 2005 the Company listed on the London Stock Exchanges Alternative Investment Market. In the first half of 2006 the Company completed the acquisition of UK sportsbetting and gaming firm, Bet Direct (, and became official main club sponsor to FA Premiership Club Aston Villa.
Current share price is 39.5 pence. A big drop of around 20pence as a result of a profit warning released yesterday
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which formed part of their latest trading update.

Seems to me, like all UK bookmakers, BetDirect have been hit by too many favourites winning. However 32Red have recently appointed my old boss and Managing Director at Ladbrokes International, Martin Saunders as Trading Director and I am sure he will turn it around.

As for buying 32Red Stock. I am definately interested based on the current price. I cannot see it falling any further. The only way is up :)
32Red breaches loan agreement with RBS

By Andrew McCormick
December 14, 2006

Online gambling firm 32Red has breached its loan agreement with the Royal Bank of Scotland due to its poorly performing sports book Bet Direct.

The company said in a statement, "As a direct result of poor trading experienced at Bet Direct, the company anticipates that the combined operating results for 32Red will fall significantly below current market forecasts for the year ending 31 December 2006."

It said that it has consequently breached the conditions of its 6m loan with the Royal Bank of Scotland.

32Red moved into sports betting in June by acquiring loss-making Bet Direct for 12.5m. It blamed continual losses and "an abnormally high number of successful favourites in UK horseracing markets" in the past two months for its poor performance.

It said it's considering moving part or all of its Bet Direct operation from the UK to Gibraltar as it looks to reduce its tax burden.

Shares in 32Red fell 15p to 39.5p following the statement.

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